Attack of the Zombie Titles!

Written by Kate Moclaire, Paralegal on Wed, March 6, 2013 @ 10:15 am

WHEN catching up on the news, any time I see an article about foreclosure, it immediately catches my eye. This may not be common for many 26 year olds, but for me, foreclosure is part of my everyday life. As one of the bankruptcy paralegals here at the Martella Law Firm, foreclosure, its logistics, emotional turmoil, and effects are one of, it not the biggest reasons I see causing people to file for bankruptcy protection.

Recently, I read an article titled, “’Zombie Titles’ Haunt Victims of Home Foreclosure”, on Business, which discussed the issues of stalled foreclosures and the ramifications of the mortgage lenders’ failure to take the property back. While the article discussed the issues facing individuals in Ohio, they were not far off from what we have seen so many of our clients go through here in Southwest Florida.

For many of our clients, bankruptcy is the only option to remove the weight and turmoil of their foreclosure, after attempting to resolve the loan with their lender through a short sale or modification. It’s the fresh start they need in order to move on with their lives. But even after their bankruptcy case is finished, the foreclosure process can still linger, keeping them stuck and waiting. At least once a week, I check the court dockets to see if our clients’ foreclosure cases have ended. The homes they had fought so hard to hold on to, but eventually resigned to give up when the bank refused to work with them, are still in their names, haunting the new life they’ve created for themselves, like a “Zombie Title” from a horror movie that just won’t die. While the homeowner may be discharged in their bankruptcy from any further liability to the bank, there are also the other bills in connection with the home, like utilities, homeowner’s insurance, association dues, as well as landscape and maintenance. Even after they’ve surrendered the property through their bankruptcy, these other bills have to be paid, and until the bank finishes the foreclosure, it’s our clients that are still responsible for these liabilities.

Read: Short Sale, Foreclosure or Bankruptcy: Which is Best for my Credit Score?

Imagine the emotional trauma of leaving your home to start over, only find out that you not only have to pay the bills for where you’re living now, but also continue to incur the expenses of the house you had to leave behind. For our clients, this isn’t by choice, and I’m often asked what can be done to speed things up. While there are options that can be pursued, ultimately it’s up to the banks to finish what they so eagerly started. Unfortunately, as we and the rest of the country are seeing, it doesn’t appear that they’re really all that interested in taking on more underwater homes, let alone caring that they continue to cause financial strain on the countless homeowner’s facing this overwhelming foreclosure crisis.
The good news is that the courts are now holding the lenders’ “feet to the fire” and forcing them to move the cases along here in Charlotte County. The lenders are facing dismissal of the foreclosure case and/or sanctions if they don’t resolve it. Hopefully, the eradication of “Zombie Titles” is near.

Contact a Real Estate Attorney

If you have a situation as we described in this article and have questions or concerns, please do not hesitate to contact us to answer your title insurance questions.